On the weekly charts the "V-bottoms" are not sustainable given the degree of overhead resistance but there is no real indication they are going to end soon either. The S&P could make it back to 1,000 before it heads south. The Nasdaq went a step further and registered a breakout with 1,759 level of summer 2004 reaction lows the next point of resistance Best of all, the Nasdaq 100 has already knocked out the summer 2004 reaction low and is on its way to the summer reaction low of 2006. The fuel to the rally has come from sharply improved market breadth. The Nasdaq Bullish Percent broke declining resistance from 2006, a key containment area on previous rallies. The same was true for the Nasdaq Summation Index: Although the S&P Bullish Percent haven't made the grade the NYSE Summation Index has cleared what was acting a bear resistance. The most overbought of the breadth indicators are the Percentage of Stocks above the 50-day MA. The S&P closed the week at a ver...

Since late March the 50-day MA of the USL has steadily risen as oil lingered around $50 a barrel . Unfortunately, USL has lots much of its competitive edge over its sister ETF, USO with both only accounting for about 60% of Oil's price. However, each ETF are showing strong characteristics of a bottom with the 200-day MA a logical target (much as copper prices are demonstrating now) Dr. Declan Fallon, Senior Market Technician, Zignals.com the free stock alerts, stock charts, watchlist, multi-currency portfolio manager and strategy builder website. Forex data available too.

Bulls keep pushing this higher to the point January reaction highs were breached in the Nasdaq on higher volume accumulation. This could all the way to the 200-day MA before it makes its actual top. The Dow was finally able to crack above declining resistance, although relative to Tech the move was small. The Nasdaq 100 is making the most of the break and is close to the next point of resistance at 1,383. It's toppy but it can get toppier! Dr. Declan Fallon, Senior Market Technician, Zignals.com the free stock alerts, stock charts, watchlist, multi-currency portfolio manager and strategy builder website. Forex data available too.

With the increasingly bearish action of the VIX moving averages there is now the additional break of support to contend with. All of this is bullish for the S&P. In itself it's no firm trading signal but it does mark a shift away from the bearish rhythms of the market into something more sustainable for bulls. All this assumes there is no counter break of 38 which drives through all moving averages and declining resistance dating back to December. In the latter case another sharp drop would materialise which would have the potential to last until there was a test of 2008 VIX highs; anything from a 1 week to 3 weeks. But for now bulls may be ready to kick with more confidence. Dr. Declan Fallon, Senior Market Technician, Zignals.com the free stock alerts, stock charts, watchlist, multi-currency portfolio manager and strategy builder website. Forex data available too.

Bullish resolve kept things going for another day and maintained short term support lines running from the March lows. The gains did little to change the picture for the indices; the Dow remained caught between converged support and resistance lines. Ready to continue higher? Dr. Declan Fallon, Senior Market Technician, Zignals.com the free stock alerts, stock charts, watchlist, multi-currency portfolio manager and strategy builder website. Forex data available too.

Short term breadth is very toppy but there has been a marked improvement in the Percentage of Stocks Trading above their 200-day MA. As of Tuesday's close there was 17% of S&P stocks above this moving average, breaking the sub-10% malaise which had afflicted S&P members back to the start of October 2008. The Percentage of Stocks above the 50-day MA has popped to 83% and is certainly in need of relief with some profit taking. With a bit of luck this might find support around the 30% mark and not the sub-5% level achieved late last year. The Bullish Percents haven't reached the highs of January but this is not surprising given the strong bear action prior to January was more conducive to counter buy signals than the weak bearish action since. Will March lows hold into 2010? Back in the day I thought January 2008 lows were an important bottom but looking back on the chart they were simply a blip in a much larger decline. javascript:void(0) Dr. Declan Fallon, Senior Marke...

A significant increase in selling volume pushed markets away from Friday's highs but will this selling mark the first stage of a top? The large number of gaps in the charts (Nasdaq below) reflects a market getting ahead of itself. My earlier comments with respect to market breadth also show a downward turn is long overdue. However, supporting technicals haven't switched negative even if overbought. The Dow honored resistance and is wedged between rising support from March lows and the declining resistance line from last year; Wednesday will be a big day. Although the S&P has already cleared its declining resistance - will the Dow follow suit? Anyone's game? Dr. Declan Fallon, Senior Market Technician, Zignals.com the free stock alerts, stock charts, watchlist, multi-currency portfolio manager and strategy builder website. Forex data available too.